Treasury Consensus Forecast for UK House Price growth

HM Treasury has recently updated its consensus forecast for UK house price growth over the next five years. Property prices are expected to rise by 2.8% during 2018, higher than many predicted at the start of the year.

While the Governor of the Bank of England has stated house prices may fall by a third in the event of a ‘no-deal’ Brexit, a situation that has occurred only once in the last 45 years, recent murmurings suggest a ‘no-deal’ scenario is less likely than many thought a few weeks ago.

Based on the Treasury forecasts, the average price of a property across the UK is expected to rise by over £27,000 over the next five years.

With affordability a key concern in the market, the Treasury expect earnings to rise on a par with house prices during 2018, and exceed price growth in 2019, 2020 and 2021. Inflation is anticipated to fall back from 2.4% in 2018, to 2.1% in subsequent years.